Connecticut Needs Job Security, Not a New Payroll Tax
At some point, nearly everyone will need to take time away from work to deal with a serious personal or family illness, or to care for a new child—which is why 54% of Connecticut businesses have added more flexibility to their leave policies in the last five years, according to a recent study of state businesses.
Yet for a second straight year, mandatory paid family and medical leave supporters are proposing that all workers in Connecticut companies with two or more employees should have this benefit.
While this and other proposals for government-controlled business practices sound nice, there’s a hitch.
Someone has to pay—and that someone is Connecticut’s workforce, who will see their paychecks chipped away with a new payroll tax to fund this program.
How much will workers’ paychecks be taxed?
According to a recent story in the Hartford Courant, “advocates do not know.”
Advocates in the state of Washington didn’t know either when they floated an identical program. The proposal was abandoned after it was projected to cost $235 million per biennium.
Now is not the time to hit workers with a new tax on their income.
Our economy is finally starting to hit its stride after eight painful years of recession and subpar growth, and pay increases always lag behind the job gains.
Over the last eight years, compensation (except for government workers) is just plain awful.
We are substantially behind historical norms in job growth and even further behind in income growth.
Some of the arguments in favor of mandatory paid family and medical leave maintain that we’re the only industrialized country in the world without it.
However, the vast majority of the world pays considerably lower wages than the U.S. And in places like Europe and Australia, where minimum wages are higher, that money is confiscated through considerably higher taxes. After taxes, many European countries pay less than the U.S. does.
The legislature needs to do everything they can to make it easier to grow and keep jobs.
Connecticut’s workforce and their families are paying close attention to what’s happening at the Capitol and the decisions being made by their legislators.
Eroding their paychecks is the wrong way to provide job security.
Maybe I'm old-fashioned, but with more Connecticut companies providing greater flexibility to their employees, I think Connecticut’s workers can spend their own income more effectively than our government will.
Let your employees know about this pending tax increase and tell your legislators to defeat these proposals.
Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.
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